House Hearing, 111TH Congress - Full Committee Hearing On Small Business and Broadband: An Engine For Economic Growth and Job Creation

FULL COMMITTEE HEARING ON
SMALL BUSINESS AND BROADBAND:

AN ENGINE FOR ECONOMIC GROWTH
AND JOB CREATION
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS

UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
HEARING HELD
MAY 12, 2010
Small Business Committee Document Number 111-067

Available via the GPO Website: http://www.access.gpo.gov/congress/house
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WASHINGTON
56297 PDF
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HOUSE COMMITTEE ON SMALL BUSINESS

ZQUEZ, New York, Chairwoman
NYDIA M. VELA
DENNIS MOORE, Kansas
HEATH SHULER, North Carolina
KATHY DAHLKEMPER, Pennsylvania
KURT SCHRADER, Oregon
ANN KIRKPATRICK, Arizona
GLENN NYE, Virginia
MICHAEL MICHAUD, Maine
MELISSA BEAN, Illinois
DAN LIPINSKI, Illinois
JASON ALTMIRE, Pennsylvania
YVETTE CLARKE, New York
BRAD ELLSWORTH, Indiana
JOE SESTAK, Pennsylvania
BOBBY BRIGHT, Alabama
DEBORAH HALVORSON, Illinois
SAM GRAVES, Missouri, Ranking Member
ROSCOE G. BARTLETT, Maryland
W. TODD AKIN, Missouri
STEVE KING, Iowa
LYNN A. WESTMORELAND, Georgia
LOUIE GOHMERT, Texas
MARY FALLIN, Oklahoma
VERN BUCHANAN, Florida
BLAINE LUETKEMEYER, Missouri
AARON SCHOCK, Illinois
GLENN THOMPSON, Pennsylvania
MIKE COFFMAN, Colorado
MICHAEL DAY, Majority Staff Director
ADAM MINEHARDT, Deputy Staff Director
TIM SLATTERY, Chief Counsel
KAREN HAAS, Minority Staff Director
(II)
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STANDING SUBCOMMITTEES
Subcommittee on Contracting and Technology

GLENN NYE, Virginia, Chairman
KURT SCHRADER, Oregon
AARON SCHOCK, Illinois, Ranking

ROSCOE BARTLETT, Maryland
MARY FALLIN, Oklahoma
Subcommittee on Finance and Tax

KURT SCHRADER, Oregon, Chairman
DENNIS MOORE, Kansas
GLENN NYE, Virginia
VERN BUCHANAN, Florida, Ranking

STEVE KING, Iowa
BLAINE LUETKEMEYER, Missouri
Subcommittee on Investigations and Oversight

JASON ALTMIRE, Pennsylvania, Chairman
HEATH SHULER, North Carolina
MARY FALLIN, Oklahoma, Ranking

LOUIE GOHMERT, Texas
(III)
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Subcommittee on Regulations and Healthcare

KATHY DAHLKEMPER, Pennsylvania, Chairwoman
LYNN WESTMORELAND, Georgia, Ranking
STEVE KING, Iowa
VERN BUCHANAN, Florida
DAN LIPINSKI, Illinois

JASON ALTMIRE, Pennsylvania
Subcommittee on Rural Development, Entrepreneurship and Trade

HEATH SHULER, North Carolina, Chairman
KATHY DAHLKEMPER, Pennsylvania
BLAINE LUETKEMEYER, Missouri, Ranking

STEVE KING, Iowa
AARON SCHOCK, Illinois
(IV)
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CONTENTS
OPENING STATEMENTS
Page
Velazquez, Hon. Nydia M. .......................................................................................

Graves, Hon. Sam ....................................................................................................
1
2
WITNESSES
Burfield, Mr. Evan, Chairman and CEO, Synteractive Corporation, Washington D.C. ............................................................................................................
Messere, Mr. Steve, Founder and CEO, Revenue Spark Inc., New York, NY ....
Whisenant, Mr. Greg, Founder and CEO, CrimeReports, Draper, UT ...............
McDonald, Mr. Tom, CEO, BeSafe, Hyannis, MA ................................................
Dofelmier, Ms. Lindsay, Co-Owner, Urban Agent Team LLC, Boise, ID ...........
3
6
7
10
12
APPENDIX
Prepared Statements:
Velazquez, Hon. Nydia M. .......................................................................................

Graves, Hon. Sam ....................................................................................................
Burfield, Mr. Evan, Chairman and CEO, Synteractive Corporation, Washington D.C. ............................................................................................................
Messere, Mr. Steve, Founder and CEO, Revenue Spark Inc., New York, NY ....
Whisenant, Mr. Greg, Founder and CEO, CrimeReports, Draper, UT ...............
McDonald, Mr. Tom, CEO, BeSafe, Hyannis, MA ................................................
Dofelmier, Ms. Lindsay, Co-Owner, Urban Agent Team LLC, Boise, ID ...........
25
27
29
36
44
49
52
Statements for the Record:
The National Cable & Telecommunications Association ......................................
55
(V)
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FULL COMMITTEE HEARING ON

SMALL BUSINESS AND BROADBAND:
AN ENGINE FOR ECONOMIC GROWTH
AND JOB CREATION
Wednesday, May 12, 2010
U.S. HOUSE OF REPRESENTATIVES,

COMMITTEE ON SMALL BUSINESS,
Washington, DC. The Committee met, pursuant to call, at 1:00
p.m., in Room 2360 Rayburn House Office Building, Hon. Nydia
Velzquez [chairwoman of the Committee] presiding. Present:
Representatives Velzquez, Dahlkemper, Altmire, and Graves.
Chairwoman VELA ZQUEZ. This hearing is being called to order.
Just as the interstate highway system revolutionized American
commerce, today we are presented with a similar challenge. Building a nationwide broadband infrastructure is an equally ambitious
task, and it is just as fundamental to our prosperity in the TwentyFirst Century.
Over the next decade, we can expect the growth of this field to
produce good-paying jobs for millions of Americans. The number of
jobs dependent on broadband and IT are expected to grow by 25
percent over the next 10 years, creating opportunities for large and
small companies in every sector of the U.S. economy.
While building a nationwide broadband infrastructure will be
vital to our economys long-term health, deploying this technology
also carries immediate economic benefits, at a time when our nation needs every job we can find. Some have estimated that over
the next 4 years, we will see 30,000 jobs a year from the broadband
investments funded through the Recovery Act alone.
Beyond the immediate payoff, widespread broadband adoption
will mean new economic opportunity for communities across the
nation. Small businesses already benefit enormously from the
Internet. For Americans looking to launch a new enterprise,
broadband offers lower start-up costs. This is especially important
now, as many dislocated workers are looking to entrepreneurship
as a way to replace lost income.
For the established small business, high speed Internet can expand a firms client base using a company website, social networking, or other forms of online advertising. Firms can utilize
voice and video communication as a low-cost method to connect
with customers around the world and reach previously untapped
markets. They can store data online, access office productivity
tools, and even improve the energy efficiency of their business.
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The FCC recently released a National Broadband Plan, an ambitious initiative aimed at accelerating the adoption of high speed
Internet. Bringing the public and private sector together, the plan
offers steps to accelerate the rollout of broadband and help small
businesses embrace these benefits. Although three-quarters of
small businesses currently have a website, only one in four sell
their products using e-commerce. In todays global economy, that is
simply not good enough.
The National Broadband Plan could help narrow this gap, creating additional growth opportunities for small companies. As this
plan is refined and implemented, the Committee will need to ensure that entrepreneurs needs are kept top of mind.
Putting broadband in more American homes and businesses is
just one part of the equation. The Internet has always served as
an unparalleled laboratory for innovation and entrepreneurship.
If we are to reap the full benefits of this economic engine, it is
vital that the Internet remain a platform where free speech and
new ideas flourish and consumers can connect with whomever they
choose while accessing services of their choice.
Just last week, the FCC released a new framework aimed at preserving this freedom without discouraging investment in our nations broadband infrastructure. In coming weeks, the strengths
and weaknesses of this initiative will receive significant consideration. Small businesses have much at stake in how the debate
plays out. It is my hope that todays discussion will shed light on
what these policies mean for online entrepreneurism.
The business owners before us today highlight the variety of opportunities created by broadband. I look forward to hearing their
thoughts on how broadband is empowering Americas small businesses now and how Congress and the FCC should take their needs
into account as we craft policies that will shape the Internets evolution for decades to come.
With that, I thank all of the witnesses for being here today and
yield to Ranking Member Mr. Graves for an opening statement.
Mr. GRAVES. Thank you, Madam Chair, for holding this important hearing on the impact that broadband is going to have on the
economy and its ability to foster Internet growth.
Technology and the ways we communicate with one another are
constantly evolving. You know, 150 years ago we had to elicit the
help of the Pony Express to deliver what would inevitably take
days to travel from a place like St. Joe, Missouri to San Francisco.
Today we can send an entire book as a .pdf file through the e-mail
and rest assured that file is going to be received across the globe
in just a matter of seconds.
To do research 50 years ago, we had to go to the public library
and hope it had the materials that we needed. Now you can log
onto your computer and access more information than the Library
of Congress can even contain.
If you wanted to buy something 20 years ago, you probably had
to get into your car and go to a nearby store. Thanks to online
shopping, we can now simply log onto our computer and virtually
buy any product from businesses, large and small, from across the
globe.
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We are all aware of the limitless services technology and the
Internet provide to our daily lives. We tend to forget that these everyday conveniences would not be available if it werent for the contributions of small businesses, like those that are represented here
today.
The change from molasses-like dial-up connections to warp-speed
downloads comes from technological innovations in network architecture. From DSL to cable modems, to fiber optics to-the-home,
the continued development and improvement of the Internet relies
on the investment of billions of dollars by private sector enterprises.
Unfortunately, the Internet and related technologies are not as
widespread as we would like to think. And there is a severe lack
of appropriate infrastructure that limits many American communities, businesses, and families from gaining full access to these
services.
Rural areas in many states are particularly likely to lack the infrastructure needed to allow them to benefit from this vital technology. Without access to affordable broadband services, the economies and development of these communities are going to suffer.
With other policies that this government adopts with regard to
technology and broadband, we must first make a commitment to
ensuring that small businesses in rural communities will benefit
from the infrastructure investment.
Regulatory policies that diminish the incentive for such private
sector investment will benefit neither small businesses nor the
economy that will rely on them for the growth needed to create
jobs.
I look forward to hearing testimony from our witnesses today on
the use of broadband and the access that is going to enable the creation of a lot of new jobs and the policies needed to maintain Americas lead in technology. I appreciate you all being here today. And
I know some of you traveled from a long ways. Thank you.
Chairwoman VELA ZQUEZ. Well, with that, I welcome all of the
witnesses. Our first witness is Mr. Evan Burfield, who is the Chairman and CEO of Synteractive Corporation. Mr. Burfield previously
founded NetDecide, a company that provides wealth management
solutions. He co-founded Synteractive in 2003, which is a strategy
and business solutions consulting firm.
You will have five minutes to make your statement. Welcome.
STATEMENT OF EVAN BURFIELD, CHAIRMAN AND CEO,
SYNTERACTIVE CORPORATION
Mr. BURFIELD. Chairwoman Velazquez, Ranking Member Graves,

and distinguished members of the Committee, as the Chairwoman
says, my name is Evan Burfield, and I would like to thank you for
holding this important hearing on the role broadband plays in driving innovation and creating economic growth and new jobs.
I am the President and CEO of Synteractive, a company dedicated to solving the really big problems in the world involving connecting people and information.
Broadband, together with instantaneously scalable cloud computing and interoperable applications, serves as a linchpin for creating the future of business. The media and the man on the street
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has a feeling that the Internet is changing the way products and
services get to market, but today I will walk you though the facts.
The first thing to know is that todays broadband and the tools
it powers are enabling innovative small businesses to out-compete
larger competitors.
In 2009 Synteractive was a key part of the team that won the
contract to rebuild Recovery.gov, which Newsweek has referred to
as perhaps the clearest, richest interactive database ever produced
by the American bureaucracy.
Synteractive, along with our partners Smartronix, TMP Government, and KPMG, was able to build the entire platform in less
than ten weeks for around six million dollars. Within a few days
of kicking off the effort, we created a development environment
using Amazon Web Services, which provided us with access to vast,
instantly scalable computing resources for a few thousand dollars
per month.
We built Recovery.gov with platforms such as Microsoft
SharePoint and FAST Search because they were off the shelf and
interoperable, allowing us to focus on design and innovation, rather
than recreating the wheel.
We wanted the site to help citizens find a recovery job. So we
created a tool in less than a day using Microsoft Bing search service that enabled citizens to search for jobs across companies that
received recovery funds. Similarly, we made Recovery.gov available
in over 50 languages in a few days by snapping Google Translator
into SharePoint
To build a platform like Recovery.gov 10 years ago would have
been a $100 million effort and would have by its very nature been
done by a company like IBM or Lockheed Martin. Our team was
able to create an innovative solution using tools from a wide variety of vendors faster and more efficiently than Lockheed of ten
years ago ever could have. Simply put, small businesses have never
been more able to punch so far above their weight.
While I am very proud of my companys success with Recovery.gov, we have our eyes on a larger target: creating a set of online services that provide other businesses with the kind of power
that we have at Synteractive.
Synteractive has clients ranging from Recovery.gov to the American Petroleum Institute to Microsoft. We have grown our revenue
from $150,000 in 2006 to nearly $6 million last year. We have the
latest in software and communications tools available to us from
the way we collaborate to managing our sales process to keeping
our books straight.
What is more interesting, though, is what we dont have. We
dont have a receptionist because an online service automatically
routes calls and delivers voice mails to us as e-mails wherever we
are in the world. We dont have computer servers humming away
in our office because everything occurs on demand in the cloud delivered by broadband. Because we dont have servers, we havent
had to hire a systems administrator.
We are a lean business, where every person we hire is focused
on driving innovation for our clients. As a result, we can offer superior talent and solutions at competitive rates.
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Synteractive is working with one of Americas leading broadband
companies and Microsoft to bring this kind of efficiency to other
businesses, particularly small businesses.
We are creating online services that provide the core tools a
small business needs, built on Microsoft technologies, and delivered
as a bundle along with broadband Internet access.
The innovation enabled by broadband is critical because it drives
efficiency. Efficiency is critical because it makes small businesses
leaner; more competitive; and more flexible; and, therefore, more
resilient to economic downturns; and responsive enough to drive
growth as economic conditions improve.
Congress should continue to take steps to keep this engine of economic growth humming. First, Congress deserves tremendous credit for the support already given for making broadband pervasive
across America through legislation such as the Recovery Act. It is
critical for our democracy and our economy that every American,
regardless of where they live, should have access to cheap and reliable broadband.
Second, it is of the utmost importance that small businesses in
America have a level playing field to compete and win. I know Congress and policy-makers are playing close attention to net neutrality. And the members of this Committee are more attuned to
the ongoing policy debate than I am. But as an entrepreneur, I
would encourage policy-makers to steer clear of foreclosing new
business opportunities for small businesses.
Third, broadband and small businesses are a powerful engine for
job creation, but it is important to understand that these jobs require education and skill. Talent is a fuel that drives small businesses like Synteractive. We require people who understand strategy, economics, analysis, design, and engineering. Regardless of experience, we demand a solid foundation in rigorous thinking, scientific and engineering knowledge, and the ability to write and
communicate clearly. Small businesses simply arent creating many
jobs relevant for mushy thinking, poorly educated people.
Therefore, the final step that Congress should take to ensure
that broadband and technology continue to be an engine for job creation is to improve the quality of education in America.
Chairwoman Velazquez, Ranking Member Graves, and distinguished members of the Committee, thank you for your time and
consideration on this important topic.
[The statement of Mr. Burfield is included in the appendix.]
Chairwoman VELA ZQUEZ. Thank you, Mr. Burfield.
Our next witness is Mr. Steve Messere. He is the founder and
CEO of Revenue Spark, located in New York. Revenue Spark provides business services to a wide variety of sustainable growth
companies.
Welcome, sir.
Mr. MESSERE. Thank you. Thank you, Chairwoman Velazquez,
Ranking Member Graves, members of the Committee.
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STATEMENT OF STEVE MESSERE, FOUNDER AND CEO,
REVENUE SPARK INC.
Mr. MESSERE. My name is Steve Messere, and I am the founder

and CEO of Revenue Spark. Revenue Spark is a company that is
dedicated to creating and fostering relationships between sustainable technology companies. These are companies that are creating
new opportunities on an almost daily basis through the spirit of invention and innovation and, as it is traditionally defined, what it
means to be an American. Just like railroads, telegraph and telephone transformed the American business, broadband is similarly
transforming the way Americans do business today.
Revenue Spark is the worlds first sales outsourcing firm to dedicate our entire focus to helping sustainable technology companies
succeed in a marketplace. We do this through a combination of new
technologies that didnt even exist five years ago.
The core of our operation is domestic sales outsourcing. Domestic
sales outsourcing avoids the pitfalls of hiring new business development staff. The typical hiring procedure yields a failure rate of over
50 percent in the first six months. And for a new business, this can
be easily mean the difference between success and failure.
Domestic sales outsourcing also transfers the time-consuming
tasks associated with research and establishing leads and doing
the development work that can oftentimes keep a company from
succeeding. So the challenge of most businesses is deciding how to
staff a team that can overcome these hurdles and provide reliable
and repeatable revenue.
We are in the midst of a real paradigm change in how computer
information is handled. Again, five years ago, individuals were dependent on their own personal computers to save and store their
information. Now that information is increasingly shared over farflung computer networks.
This is the cloud computing. And it means instantaneous cooperation is now possible between different individuals regardless
of where they might be located. And this translates into increases
in productivity.
As we all know, increased productivity means a better bottom
line. And a better bottom line means more and better jobs. Whether this happens via SalesForce, Google Documents, Skype, Jigsaw,
Web Conferencing, Twitter, iPod, all of these things are the numbers of new technologies. It all means the same thing, which we are
changing the way we do business, almost on a daily basis. And all
of these technologies rely on fast, reliable, and accessible
broadband.
The Internet removes these economic barriers. So that at Revenue Spark, we are, in effect, a virtual company. For us, the term
company headquarters is almost irrelevant. We do almost everything via telecommuting.
All the members of the Revenue Spark sales development team
have a proven track record of being successful in sales outsourcing.
In addition, all those members have spent an average of over 15
years working. But they need these tools. So telecommuting allows
us to attract the best at their best. And it is an the advantage for
us and for society in these following things.
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It provides fuller employment; less strain on infrastructure; increased productivity; reduction in turnover and absenteeism; reduction in carbon footprint and energy use; an expansion of our talent
pool; and, one of the most important things, it helps us put recently
displaced people back to work because theyre not limited by the
geography that they face.
So what I think we want to conclude with is that small business
and medium-sized companies are the engines of economic growth
in the United States today. They are dependent on the Internet to
bring their ides to market. Broadband is the new Main Street and
not just Main Street U.S.A. but everywhere in the world.
For us at Revenue Spark, the Internet is an indispensable tool
for what we do and what we do best, which is tell stories, because
that is what we really do, we tell a story, a true story, about new
technologies and about the boundless creative accomplishments of
American innovators. And that story is as old as America itself.
There is a new chapter that is being written, even as we sit here,
a tale of otherwise undiscoverable technologies and how America
can flourish and grow in a way that is sensible, sustainable and,
yet, preserves our precious resources for our children and childrens
children, not just here in the U.S., but all over the world. And for
all over the world, it is, of course, a story about jobs, very good
jobs. And we use websites, and we use these tools to make that
possible.
Given a choice today between having telephone service or Internet, the vast majority of companies we work with would choose the
Internet without hesitation. And that is the very definition of the
sea change that we are faced with here today.
All of these tools that we have talked about and more serve to
increase efficiency, which means a better bottom line, which means
more jobs, good jobs, the jobs of today and tomorrow, not the jobs
of yesterday.
Chairman Velazquez, Ranking Member Graves, and members of
the Committee, thank you for this opportunity.
[The statement of Mr. Messere is included in the appendix.]
Chairwoman VELA ZQUEZ. Thank you.
Our next witness is Mr. Greg Whisenant.
Mr. WHISENANT. You got it. Thank you.
Chairwoman VELA ZQUEZ. He is the founder and CEO of
CrimeReports in Draper, Utah. CrimeReports is the largest online
resource for crime information, offering software tools for law enforcement agencies.
Welcome.
Mr. WHISENANT. Thank you. Thank you, Chairwoman Velzquez,
Ranking Member Graves and members of the Committee.
STATEMENT OF GREG WHISENANT, FOUNDER AND CEO,
CrimeREPORTS
Mr. WHISENANT. My name is Greg Whisenant. I am the founder

and Chief Executive Officer of Public Engines, Inc. We make the
CrimeReports.com website.
I founded CrimeReports.com in 2007. And as of today, we work
directly with nearly 1,000 law enforcement agencies throughout the
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country to build the National Crime Map, which would give every
American free access to street-level crime information within 24
hours of its occurrence.
We sell a monthly subscription to law enforcement agencies
under a software as a service model. We have a single instance of
software code on the Internet that works with nearly any law enforcement agencys existing technology systems.
We dont sell hardware, software licenses, or maintenance contracts. We do everything from the Internet. So we are very capitalefficient. Our prices are often 1/100th of what our competition
charges. So we have enjoyed exceptional growth in just three years.
We work with law enforcement agencies in most of the districts
represented by the members of the Committee here. We cover more
than 20 percent of the U.S. population.
I would like to emphasize four key observations in my testimony
today. Observation number one, CrimeReports is a small business
that uses technology and increasingly broadband to compete effectively and create jobs.
Like many other companies in the United States, without the
Internet, CrimeReports.com would not exist. And, with it, we have
seen exceptional growth. We currently have 41 employees, of which
30 were hired in 2009, mostly in sales and software engineering.
The users of our service are not just law enforcement agencies
but ordinary members of the public, whose ability to gain access to
street-level crime data is made easier with Internet access. This is
particularly important in public safety, where members of the public can change their behaviors to protect themselves, their families,
and their property if they know what types of crimes are happening.
My companys service does not rely specifically on broadband.
However, as we have grown to support this vast network of agencies, our customers tell us that we could help them with new bandwidth-intensive applications. The limitations of these advanced applications are constrained by technology in that the entrance fee to
the toll road is simply too high. Although the invisible hand will
solve many of these problems over time, we can move the needle
in a meaningful way with a vision of where we are heading and
a concerted effort to get there.
Observation number two, broadband is vital infrastructure for
technology and non-technology companies alike. And as an equalizer in business, it encourages innovation that benefits consumers.
Like other conditions, such as education, access to capital, and
a market that is largely unencumbered from excessive regulation,
widespread access to broadband is a critical ingredient in economic
recovery, and more so for long-term economic prosperity. It lowers
the barriers to entry for people to create new and innovative technologies. It lowers costs for the delivery of content. It democratizes
participation in the economy for entrepreneurs with new and exciting ideas.
When I started CrimeReports.com, we had virtually no direct
competitors. As we started to grow quickly to expand the National
Crime Map, several existing software companies began to pay attention and released competitive products. The Internet and
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broadband were tools that we used to drive down the cost of providing our service, and soon other companies used these same tools.
Today we are focusing on efficiency, growing quickly and optimizing our processes, but ultimately it is the consumers of our
service, local law enforcement agencies, that are the clear winners
in this textbook competitive market, where private companies are
working to create the most value at the lowest price.
By any measure, widespread access to broadband is an accelerator to efficiency. Those economies that achieve the highest level
of broadband penetration will be the first to create the new efficient services that will take advantage of these high capacity networks and will have an advantage in the long run.
Observation number three, widespread access to broadband is a
proxy for other types of investments in the economy. Part of the
mandate of government is to foster conditions that will contribute
to a strong and vibrant economy.
During the economic downturn, much of the focus has been on
stabilizing components of the economy whose failure would have
had catastrophic consequences. Substantial resources have also
been devoted to creating economic stimulus through various fiscal
and monetary policies, including direct investment in key industries, and in many cases directly in specific companies.
Unlike other types of investment, renewed commitment to and
investment in broadband is more like lowering interest rates. It is
meaningful to all players and simply accelerates the timeline toward greater efficiency and innovation.
Observation number four, widespread access to broadband is a
driver in open, participatory government, as the President has envisioned. In connection with its economic contribution, widespread
access to broadband will put entire communities and individuals on
more even ground, not just in their ability to gain access to information but also in their ability to contribute and innovate in unexpected, creative ways.
Government 2.0 is an emerging current example of how when
coupled with the right political leadership, the investments we
have made in technology can break down socioeconomic barriers
and involve our democracy into one that is more transparent, collaborative, and participatory.
Government 2.0 is a recognition that in many cases todays problems are too complex to solve alone, either as legislators, administrators of government agencies, ordinary citizens or private companies. We need to create the attitudes and technological vehicles
that will facilitate contributions from experts and knowledgeable
individuals to get to the best answers.
Fortunately, many of these technology systems are being established, but they are limited in their reach and could be vastly improved and accelerated with a more expansive deployment of
broadband.
As it has always done, the American economy needs to push
through a continuous cycle of create, destroy, and repeat innovation
to remain competitive. Among other technologies, broadband will
be a driver.
Thank you.
[The statement of Mr. Whisenant is included in the appendix.]
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Our next witness is Mr. Tom McDonald, the CEO of BeSafe
Technologies, a company located in Hyannis, Massachusetts.
BeSafe Technologies is a small business that has developed an
emergency response tool that assists first responders.
Welcome.
Mr. MCDONALD. Chairman Velazquez and Ranking Member
Graves, Committee members, thank you very much for the opportunity to speak with you today.
STATEMENT OF TOM McDONALD, CEO, BeSAFE
Mr. MCDONALD. I am the CEO of BeSafe Technologies. And our

corporate headquarters is on Cape Cod. That is because I want to
keep my feet in the sand.
Our focus is clearly and has been on public safety. As a matter
of fact, our company was founded by the Associate Commissioner
for Public Safety from the Commonwealth of Massachusetts back
in the 90s. And I joined with him. I was the Superintendent of
Schools in the Town of Barnstable on the Cape.
And having witnessed the tragedy of Columbine, we found that
there was a tremendous need for more and vital information, not
so much the communication, which has been filled rather effectively. We found that there was a lack of vital information available instantly to first responders in the event of an emergency
within a facility.
And, with that in mind, BeSafe Technologies was created and
has been fostered and has grown as a result of working through
broadband. And the availability of broadband to the first responder
community is critically important, not only to the success of our
small business but obviously to access for first responder communities throughout the United States.
Using broadband, first responders can access this vital information on any building, any facility, getting aerial shots, building
blueprints, contact information, all the vital information that may
be necessary in those. As an example, Columbine, you all witnessed
that, as we did Virginia Tech. Virginia Tech was over in nine minutes.
Recognizing that fact, we have to have a delivery system that
brings vital information quickly and is accessible to first responders in a timely fashion. And in many cases, it requires a great deal
of bandwidth. Without broadband, BeSafe Technologies would be
very limited.
As a matter of fact, before we saw the expansion of broadband
really taking effect and continuing to take effect across the country,
we were a CD-ROM, paper-driven company. No longer. We invested
significant dollars into developing our company and the accessibility to the Internet so that all first responders can have immediate access if and when they need it, also for preplanning and so
forth, in the event of a bomb threat, a hazardous materials spill,
any kind of an emergency, an earthquake, any emergency in places
where large numbers of people might congregate.
And we work with public and private institutions. We work with
colleges, corporate, and government facilities across the country.
And we provide all of the vital information. We work very closely
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with SWAT team members, police chiefs, fire chiefs, school departments, college administrators to make certain that what information is needed is there when it is needed.
We also do very effective training. We try to do as much as we
can in person. There is nothing better than a face-to-face meeting,
where you can look somebody in the eye and talk to them effectively and train them.
But I can tell you this. Its a large country. And what we are able
to do through the use of broadband is train and effectively train
first responders, thanks to the exposure of broadband across the
country. That is something that we would hope continues to expand
exponentially going forward in the future.
In addition to that, we train hazmat teams, police teams. We do
document management, all of these types of things that wouldnt
be possible without this.
And it really was the convergence of BeSafe and Americas robust, high-speed broadband networks that make this all possible.
Ten, 20 years ago what we are doing today wouldnt be possible.
Therefore, I cant stress enough how important the expansion of
broadband is to our business and other businesses throughout the
country.
We look to continue to invest in bringing our technology to the
general public, to private and public entities, and continue to work
as a small business. And our survival is really dependent on the
continuing implementation of broadband.
So, with that in mindand I would speak to the fact that my
first career, while it was in education, Im talking and speaking to
you today from Main Street of little America and asking that you
do whatever you can to continue and support the growth of
broadband in America.
And I would ask you to carefully consider any burdens to small
business. We are working extremely hard every day to improve the
companies that we own and the lives of the people that we serve.
And I would ask the members and thank you for listening to us,
the people on the front lines, and hope for improved coordination
and renewed growth in small business.
[The statement of Mr. McDonald is included in the appendix.]
Chairwoman VELA ZQUEZ. Thank you, Mr. McDonald.
And now the Chair recognizes Mr. Minnick for the purpose of introducing our next witness.
Mr. MINNICK. Thank you, Madam Chair.
I appreciate the opportunity to be able to come before this Committee today to introduce a remarkable young woman, who is from
my district, Ms. Lindsay Dofelmier.
As the former CEO of two Idaho-headquartered businesses, I am
proud to present Lindsay as a tremendous example of entrepreneurship and small business leadership in my home state. Her resume reads like a promising case study of what people who are
smart, technologically advanced can do utilizing the latest
broadband technology to create new business opportunity and more
efficiency in the market.
In her current capacity, Lindsay is the CEO of Urban Agent
Team, a successful high-tech real estate brokerage firm
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headquartered in Boise, Idaho. As her testimony today will highlight, Lindsay has utilized broadband technology to establish her
real estate companies and fuel her business, which has now grown
into a three-state operation, operating also in our adjoining States
of Oregon and Washington.
I think her story is a remarkable example of what a generation
younger than you and I and technically savvy can do with this new
emerging technology to create new jobs and opportunity any place
in America. New businesses depend upon broadband technology
and other new innovations that simply break the model for how
business is traditionally done.
So I am very pleased to be able to introduce Lindsay to the Committee. I will warn you she speaks Japanese, but I suggested today
it might be better to testify in English. I am proud to present Lindsay.
STATEMENT OF LINDSAY DOFELMIER, CO-OWNER, URBAN
AGENT TEAM LLC
Ms. DOFELMIER. Good afternoon. Chairwoman Velazquez, Ranking Member Graves, members of the Committee, as Representative
Minnick said, my name is Lindsay Dofelmier. And I appreciate
your invitation to testify today on behalf of my company: Urban
Agent Team.
Representative Minnick, I would also like to thank you very
much for taking time out of your busy schedule to introduce me to
the Committee. I follow your career, and I appreciate all of your
efforts on behalf of small business in Idaho.
As Representative Minnick said, my company, Urban Agent
Team, began in Idaho. It began when I learned that the average
relator was a 51 year-old female. I had a hunch that the echoboomer demographic was under-served and under-represented in
the real estate industry. As a result, I began targeting this demographic.
Echo boomers, also known as Gen Y, Millennials, or the Net Generation, are the children of baby boomers. There are approximately
80 million of us between 15 and 33 years old, making us second
in size only to the baby boomers and by some estimations larger.
We are a well-informed media and tech-savvy generation that
grew up with computers and the Internet, both at home and in
school. Thanks to the Internet, the world has been at our fingertips
for most, if not all, of our lives.
With vast amounts of information only a click away, we are wellversed in technology, culturally literate, informed on world affairs,
and poised to revolutionize the economy.
Urban Agent Team speaks to this demographic. We are a company of Millennials, for Millennials, and by Millennials. With offices in Boise, Seattle, and Portland and frequent travel among
these cities, constant connectivity to wireless or mobile service is
absolutely essential.
Access to the Internet is our business. Without the existence of
broadband and social media, Urban Agent Team would not exist.
With agents throughout the Northwest, the ability to collaborate
and communicate instantly and effectively is the foundation for our
business. In order to do this, we use a variety of Internet-based,
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cloud-computing programs daily. We manage our company domain
and meet our IT needs with Google Apps.
With access to online e-mail, documents, and the ability to manage and view one anothers calendars, we are freed from the constraints of hard drive-based applications and can collaborate virtually.
We have our weekly team meetings via Skype, use Dropbox for
online file storage, send and receive files via Sendspace, manage
our cash flow with Google Docs, and run our finances with
Quickbooks Online. With Google Alerts, I know whenever someone
anywhere in the world uses our company name or one of our
agents names in an article or post on the Internet. With the click
of a button on our iPhones or laptops, we can access any contract,
one anothers calendars, or chat from any wireless access point.
The use of technology in our business is not limited to the back
end, however. A majority of the online tools we use are aimed at
our clients. With the versatility and mobility of the HP Mini, our
customers are only a click away, even on the road.
We use a variety of other programs, such as YouTube, Google
Maps, IDX Broker, and MailChimp, to communicate with and advertise for our clients. We depend on the Internet and connectivity
for day-to-day operations.
Due to the instant gratification of the Internet, todays highly
connected consumer demands an immediate response. In order to
provide better service than our competitors, we must oblige.
Our clients can e-mail, text, or use social media to contact us
during traditional post-work hours. Our ability to quickly respond
to such requests increases our conversion rates and overall customer satisfaction.
In an era of information overload, we have captured and held our
clients attention by recognizing and exploiting an under-served
niche market. Rather than trying to be everything to everyone, we
have specialized our business strategy.
Our approach to how we present ourselves and how we have positioned our brand is unorthodox and embodied by our motto,
Were not your parents real estate company.
We dont span the digital divide, as our clientele tend to be
young, tech-savvy, educated, and diverse. As such, they connect
with our honest, straightforward brand.
Through the use of a variety of social media platforms, we have
been able to build our brand identity, capture new leads, make
friends in new markets, keep our followers up-to-date on our
whereabouts, and maintain strong relationships with people we see
infrequently. With social media, we can connect with like-minded
individuals in other cities, states, and even countries.
Twitter has been the bread and butter of our growth. Since joining Twitter two years ago, we have amassed a following of 4,500
users, most of whom we did not know prior to Twitter and many
of whom we have yet to meet. In 2010 alone, we have gained 12
clients as a result of Twitter. The best part is the bulk of these programs are open-source and free.
As a small business founded during the recession, watching the
bottom line with hawkish eyes has been key to our survival. We
are a virtual company with no brick-and-mortar offices. The Inter-
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net has allowed us, instead, to create our office online, thereby saving us tens of thousands of dollars a year.
Our online presence functions as a storefront, business center,
and property search. In addition to office rent savings, the Internet
has allowed us to cut our costs with access to a multitude of free
tools, by consolidating positions and allowing for virtual assistance.
As a result, we can grow regionally without the traditional costs
associated with such expansion.
Instead of investing in offices, redundant support staff, hardware, and software, we have invested in growth. The monetary savings the Internet has provided us has fueled such, allowing us to
successfully compete with much larger and more traditionally managed companies within our industry.
I can confidently say that the success that we have achieved is
a direct result of our ability to access broadband. This is why the
National Broadband Plan and digital literacy efforts aimed at small
businesses are causes that I feel passionately about.
A generation of tech-savvy entrepreneurs with broadband access
will fuel job creation and economic growth. The Internet puts
knowledge in the hands of the user. And we all know that knowledge is power: power to learn, power to think, and power to create.
The goals of the National Broadband Plan summarized as access,
speed, affordability and clean energy are laudable goals that every
American should embrace.
The fact that we as a nation are already trailing other countries
in this arena is of great concern to me for the future of our economy. I truly believe that without the Internet, the potential for
small businesses to successfully grow to medium and large businesses would be far more difficult.
On behalf of myself and everyone at the Urban Agent Team, I
thank you again for your time.
[The statement of Ms. Dofelmier is included in the appendix.]
If I may, I would like to address my first question to Messes.
Burfield and Whisenant. The National Broadband Plan outlines
recommendations on how the federal government can utilize
broadband. It seems to us that it will require a public-private partnership. Can you talk to us about the role that small businesses
will play in ensuring governments harness the power of
broadband?
Mr. BURFIELD. Thank you, Chairwoman.
I mean, I think, as I laid out in my initial testimony and as Mr.
Whisenant addressed, you know, the power of broadband to impact
the way that government operates, a Government 2.0 revolution, if
you will, that allows the representatives in this room to connect in
a much more direct and meaningful way to citizens allows citizens
to connect to the actual data and underlying information that tells
them what their government is actually doing, you know, I believe
that is critically important to our government, to democracy in this
country. And I think it is driven by cheap, pervasive, affordable access to broadband, wherever you happen to be in this country.
In terms of the roles of small business in driving this Government 2.0 revolution, I believe it is very, very critical that there is
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an open playing field for small businesses to access and drive this
kind of innovation.
You know, there is a natural tendency for large, entrenched businesses to want to shape the playing field in a way that dictates disruptive innovation on their timeline and on their terms.
You know, broadband affords access for small businesses to come
in and drive innovation and government at a much more rapid pace
and in a much more meaningful way. And I think that any policies
that support making that access as open as possible to small businesses is going to be good for citizens, good for small businesses,
and good for our economy and democracy.
Chairwoman VELA ZQUEZ. Do you see any barriers preventing
small businesses from getting contracts in this arena?
Mr. BURFIELD. Well, obviously from my perspective, we were able
to win a pretty meaningful and substantial contract to implement,
for example, Recovery.gov. You know, with that said, the way that
contracting with the government is often set up, a lot of those opportunities dont end up becoming available for full and open competition.
Recovery.gov was a situation where Congress had dictated that
the platform had to be implemented very quickly with some very
aggressive requirements. And the administration felt that they
needed to go out and find the most innovative, best companies out
there possible. And it was, in fact, an open competition. We had
one week to respond to it.
That is not always the case. A lot of these systems are ending
up going to the entrenched incumbent contractors, which are often
large businesses that have little incentive to offer the kind of highly innovative approaches that we provided with Recovery.gov.
Chairwoman VELA ZQUEZ. Mr. Whisenant?
Mr. WHISENANT. Yes. Thank you.
Mr. WHISENANT. I think we could use some overhaul. I feel as
a small business distinctly disadvantaged in the purchasing process, actually, because it is so burdensome. And I dont think it is
necessary as much as it probably used to be.
On the open government, making sure that government is using
it, I think the technology is going to invite people to organize better
and more innovation to come out of that. And I think it is really
a question of political leadership more than it is of technical capability.
I think the administration certainly has been pushing for government to leverage these networks and to use broadband and other
technologies in innovative ways. I think there is an opportunity for
legislative leadership as well. And there is plenty of ground to
cover that would benefit both government and small business.
Mr. Messere, last week the FCC announced a new framework to
preserve an open Internet. In your opinion, what would the preservation of an open Internet mean for the growth of the green technology start-ups that you work with?
Mr. MESSERE. Thank you very much for the question. And it is
an interesting one. The framework itself represents a difference, I
guess, in understanding about what the FCC can regulate. That
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specifically opens up the doors for a change. And so it will be interesting to see how that will work.
The Internet essentially is two parts. And from our perspective,
there is the ability to communicate over the Internet, which is the
connection, if you will, and then there is the content. And so these
two things are partly a part of that challenge.
From our perspective, the most important thing is the ability to
have connective connections, if you will, between any one of our offices, between any one of our employees. And this supplies globally
So from our perspective, that is the most important thing.
To make it really simple, if you look at each one of our employees
as a virtual point of access on the net, each one of those has a
broadband provider. And each one of those providers generally provides a similar platform. But if they dont, if its unique and if
there are uniquely different things that dont share commonality
between them, it means that essentially we would no longer be
able to use some of the tools we use.
So imagine if we couldnt use Skype, which is a telecommunications technology that acts like a phone. It is vitally important for
some of our members to be able to use Skype to communicate. And
if their broadband provider were limiting those functions, that
would be a problem.
So our greatest interest is in maintaining and having access to
a common set of connectivity. And the content itself isnt meant to
be part of that challenge, but I can understand how the FCC is facing that.
Mr. McDonald, I represent New York. Coming from New York,
I am very much concerned about improving emergency communication with our first responders. You spoke about that and the services that you provide through your company.
And so, as we know, first responders have traditionally relied on
paper blueprints
Mr. MCDONALD. Yes.
Chairwoman VELA ZQUEZ. to navigate a building. You say how
important it is to move this information to the Internet. And we
all know that it really enhances public safety.
My concern or my question is, how do you balance this benefit
with ensuring that what is web-based data is kept safe and secure?
Mr. MCDONALD. Excellent question and one that we face every
day. Let me start by saying yes, we do rely heavily on the Internet
and access for that for a variety of reasons, which I will speak to
in a moment.
First of all, lets be clear. I know students who have been able
to crack almost into the Pentagon. So I am not going to tell you
that they cant get into almost anything. Having said that, we put
countless amount of time and energy and resources into ensuring
the security of our system.
And the other thing, based on the way we have set up our network and accessibility is obviously there is extremely redundancy
to what we do. Its backed up. Its supported. Its password-protected and so forth. And there are firewalls and other kinds of safety systems built into what we do.
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I also will tell you that most police departments still do rely on
paper and CD-ROM. The fact of the matter is we provide it in
paper and CD-ROM. But as soon as you publish a paper product
that is in the hands of a first responder and the person who is
managing that facilitys cell phone number changes, that information is now outdated.
And that lack of clarity in the information you have in front of
you could be the difference in responding effectively or not. And so,
like everything in life, you need a balance. And here you need a
balance of the three, you know, low-tech, mid-tech, and high-tech.
Broadband brings the high-tech capability to what we do. Its vitally important because what happens now is if your cell phone
number changes, that is updated immediately. And the system already immediately generates an e-mail to all people in the system
who have access, keeping them posted on any changes. So vital information, timely information is important.
Mr. Graves? Thank you.
Mr. GRAVES. Thank you, Madam Chair.
I want to talk about rural areas. And in terms of you might each
speak to this and how it relates to your business, if it is not applicable, just say so, but what barriers have you seen in accessing
customers in rural areas or expanding into rural areas? And what
barriers are out there? What barriers are still out there or you
have seen in the past?
And also I am very curious to know if you think that is a growth
area. Some folks would believe that moving modern technology or
expanding broadband into rural areas is a waste of time and
money, but I would be very curious.
Mr. BURFIELD. You know, it is interesting. The lead of our visual
design community, considered one of the foremost experts in the
world on designing user experiences on Microsoft technology, actually lives in Laurens, South Carolina. And having gone down there
and had dinner with her a few times, it is about as rural as you
are going to get in South Carolina.
She is able to access our team in Washingtonwe have resources
in Taiwan, we have resources in Indianearly seamlessly because
she does have access to broadband technology. She is on, as we
have mentioned a number of times, Skype continuously video conferencing with a distributed team around the world.
You know, I am not sure she would joined Synteractive if it
meant leaving Laurens, South Carolina. The ability to have the
kind of quality of life, the kind of community that is important to
her, while still having access to a global team and working on global problems was highly meaningful to her. And it was highly meaningful to Synteractive.
You know, that is not always the case. I have certainly in my
travels been in any number of places where you cant get that same
kind of access in rural America. And I think in order to continue
to drive those kinds of economic opportunities, in order to continue
to drive those kinds of employment opportunities, we do need to ensure that rural America has full access to broadband, preferably
wirelessly.
Mr. GRAVES. Mr. Messere?
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Mr. MESSERE. Yes. I would agree consistently with what has
been put out there on this subject, which is that from our perspective, from our companys perspective, we have hired a number of
people who could only have gotten access to our company with
broadband in places that are quite remote as well also.
I have a couple of employees in North Carolina. I have had employees in Texas. I have had employees in Nevada. So I have had
employees that are in many places that are quite a bit far away
from the central core center of business, where their ability to be
able to work for us is completely enabled by the broadband access
that they had.
What our biggest concern and what has been a problem for us
is when that broadband isnt strong enough and sometimes that is
the case, we cant use some of the tools like Skype. Skype depends
on some kind of strength of access, if you will. And when its a little
bit below that, it starts to fail, which anyone who has been on a
bad cell phone call knows what that is like. So we try and avoid
those kinds of things, but that is our biggest concern in order to
use some of these technologies.
As I said in our opening statements, my biggest concern is that
is what we know of today. In five years time, those technologies
will continue to push forward. And we are really wanting to be able
to make sure that all of our employees can stay with us.
I cant imagine the heartbreaking conversation of having to lose
an employee because they could no longer keep up with the technology. That would be a great and grave concern for us.
Mr. GRAVES. Mr. Whisenant?
Mr. WHISENANT. In my circumstance, I dont know if there is a
huge effect in the rural communities except that I think that if
there is a gap, it is just going to get worse.
One of the interesting thing about broadband and if there is a
renewed investment in broadband is it will enable services that we
cant even imagine. We can certainly think of common ones and obvious ones, like telepresence, remote medicine.
These are services that if you have access to broadband, you will
benefit from that. And I think rural areas will be increasingly disadvantaged and cut off from those educational and even, you know,
telemedicine, those types of services that will grow and flourish
over time.
Mr. MCDONALD. Well, my sense is that broadband is expanding.
First of all, it is vitally necessary in rural America. Take, for example, the incident that happened in Amish country. I mean, there
are many rural spaces where information is vitally important.
Bad things dont just happen in big cities, although they do happen in big cities. And so we need that access everywhere. But it
is my belief and, from what I have read, that broadband is continuing to expand and is investing. There is significant investment
going in every year to enhancing this implementation across the
country as not only accessibility but also increasing speed of access,
you know, the speed of an error.
Those two things are very important to us as a company. And so
I am heartened by the fact that I see broadband continuing to
grow, continuing to be more accessible. We are not there yet, I
dont think, but I am heartened by that. And I think that down the
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road if we continue on the plane that we are going, that we will
arrive to where we need to go.
And I would just caution that it is important that all of us in
small business need to know the rules of the game moving forward,
how things are going to work, what access people are going to have.
When we go to putand I will finish. Probably the limiting factor for us in rural areas is that police cruisers and so forth may
not have laptop computers in their vehicles, may not have the
connectivity there. That is something where I see necessary investment going forward.
Mr. GRAVES. Ms. Dofelmier?
Ms. DOFELMIER. As a Westerner, this is something that is particularly important to me for two reasons. One, I grew up in the
West. And, as you well can imagine, we have a lot of space out
there, a lot of rural areas.
Most of us that live in the cities in the West, we choose to live
there for a lifestyle. So we like to go out and camp and fish and
hunt and whatever it is that we all do. And telecommuting is essential to our businesses. So often, even if we do live in the cities
in the West, we need to have access to our businesses when we are
having our leisure time as well.
Additionally, when I grew up in a small town in rural Utah, we
were definitely at a disadvantage with the Internet. Only recently
did my dad actually even have access to it. He had to get a satellite
Internet at his home. So whenever I would go home to visit my
family, I was effectively cut off from my business. And that is often
how it is whenever I go on vacation or spend leisure time.
So I think it is absolutely essential to Westerners, perhaps even
more than in other areas of the country where there is greater
connectivity.
Mr. BURFIELD. Madam Chair?
Chairwoman VELA ZQUEZ. Mr. Altmire?
Mr. ALTMIRE. Thank you, Madam Chair.
Mr. Messere, this is directed at you. Just for way of background,
I am very interested in the export component of this. As you know,
the U.S. Commercial Service was created specifically to help U.S.
companies find international business partners in the worldwide
marketplace. And one such example is in my district.
I am familiar with Intake Process Group, which is a small business that designs web-based systems, controls for use in manufacturing. And it supports many larger customers, corporate folks that
a lot of folks would know the names. And in western Pennsylvania,
the U.S. Commercial Service has established an office to help companies such as Intake succeed.
My question for you is, the administration, of course, has set this
five-year goal to double U.S. exports. And I was wondering if you
could discuss how technologies developed specifically by small U.S.
firms can more effectively reach the global marketplace.
Mr. MESSERE. Well, thank you. That is part of what our business
is about. So it is sort of an opportune ability for us to address that
specifically.
Reaching out to international opportunities is really dependent
on the most important part of their go-to-market strategy, which
is what differentiates their product or service. And in what we are
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really seeing, especially in our area which I focus on sustainability,
which is a lot about renewable energy and waste optimization,
those types of things arethey have a global audience of possibilities in the market, but they have to be differentiated. And so what
we have to do if we are going to help them is learn how to get that
differentiation to be told.
I think we have talked about some of the technologies right here
at this table today. Certainly a website, as you know, is now a
must-have for every business. In addition to that, we are starting
to see a lot of technology along the areas of things like Twitter.
Our company alone has over 7,000 people following us. And we
have put very little effort into anything more than hanging a shingle up for that. And that has a global audience.
As a result of thatand this is sort of getting to your pointin
our example, we not only use Twitter, but Twitter actually points
people back to our website, which then feeds an international audience of participants. On any given day, almost 60 percent of the
people who visit our website are from offshore. So that is part of
the solution.
So it is telling a story; differentiating using the tools; and then,
lastly, it is using those tools now to get to a market opportunity.
And a company like ourselves, that is what we specialize in.
So we use the broadband technologies now to connect directly to
companies and services in foreign markets. So as we are working
today, I am now setting up a New Zealand office that will allow
us to have a beachhead in New Zealand, Australia, which will
eventually get us Singapore, Hong Kong, et cetera. That is all,
again, because of broadband technology.
Mr. ALTMIRE. Thank you.
I wanted to switch subjects and talk to Ms. Dofelmier for a moment. You talked a lot about access to the Internet and how important broadband is. I wondered if you could talk about the fact that
many small businesses report that the cost of broadband is a roadblock to the adoption of it. And I was wondering how the cost of
broadband affects your business, in particular, and what advice you
would have for us to help make it more cost-effective for small
businesses.
Ms. DOFELMIER. Well, as was mentioned earlier, I mean, I think
that having an equal playing field in terms of accessibility and
speeds is really essential to small businesses because as a cost of
service, as it exists now, you know, we are penalized if we dont
have deep pocketbooks and we cant afford a fiber optic line. So if
something goes down on the network or if our speeds are slow, we
are crippled as we go along or we have to go to a coffee shop or
try to find another network, particularly in our business, where we
are always on the road and we are not always at our office or at
our home with our speeds at home.
So I think that, really, it is essential as more and more people
choose to, particularly in the Millennial generation, work for themselves or choose to telecommute for the lifestyle, that having access
anywhere and having equal speeds of service is just reallywithout that is a severe disadvantage to our businesses.
Mr. ALTMIRE. No further questions.
Chairwoman VELA ZQUEZ. Ms. Dahlkemper?
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Ms. DAHLKEMPER. Thank you, Madam Chair. Thank you to our
witnesses here today for your testimony.
I am actually from just a little north of Mr. Altmire, in northwestern Pennsylvania, very rural area except for basically the town
I am from, Erie. And so throughout those counties, Erie County,
Warren County, Crawford County, we have several small telecommunications companies that have strategies to deploy
broadband in these rural, under-served areas of my district.
As you all testified, you know how important it is to have access
to those businesses. Unfortunately, many of these small broadband
companies are not able to access capital. And they are as fully leveraged as possible. They applied for some of the recovery funds,
and they didnt receive any.
So I want to know if you have any suggestions for these small
companies like those in my district. They are having trouble accessing that traditional capital and also are not big enough to compete
for some of these government loans that are out there.
I dont know who would like to answer that question. Anyone
have a thought on that?
Mr. MCDONALD. If I had all the answers to that, I would probably be sitting in Hawaii doing this over the Internet. But the fact
of the matter is capital is restricted today. There are challenges to
that.
But having said that, I think you simplyyou know, you have
to start small. And you just have to grow in steps. You have to take
steps. And so perhaps you cant get a million dollars or two million
dollars, but maybe there are ways to bring in private investment.
You know, my experience is having experiences myself, if you
have a good idea, there are angel investors. There are other investors out there who will be willing to take a risk and work with you.
It comes down to having the right idea, the right place, the right
implementation. And I think anyone is doable. And so I wouldnt
simply want to relyalthough I am not opposed to government
loans, loans are not my favorite thing because with that comes the
repayment. And, you know, as a result of that, my take is I would
rather bring investment in from the private sector to help us grow
if and when the time is right.
And so I think if I were to advise them, I would say put together
your business plan and go out there and look for some private investors to help you with that so you can grow because there is no
question in areas of Pennsylvania as well as elsewhere that access
to broadband by the rural communities is extremely limited and extremely important.
Ms. DAHLKEMPER. Mr. Messere?
Mr. MESSERE. Yes. Actually, I will jump in as well. I mean,
again, sort of what our business is about is helping companies get
to market and figure out where they can grow their sales revenue.
I think in this case, it comes down to a matter of mapping out
the potential. So if they are looking at a market in a very specific
place, they really have to have a good idea of how many people
would purchase the service, at what price point is it cost-effective
and, most importantly, competitive. Are there alternatives to that
solution?
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As was pointed out, there are technologies that include satellite
technologies. So those are kind of the fundamentals to start them
off on that. And I might also recommend if they have a higher education institution that you can access when in your district or close
to your district, maybe working with some of the folks there and
getting them together to have them work through this idea of how
do you write a business plan, how do you learn how to figure out
how many clients are there in this business because it has to be
cost-effective.
And one of our roles in doing sustainability is always about that
profitability drives the issue of innovation.
Ms. DAHLKEMPER. Mr. Burfield?
Mr. BURFIELD. I would also think that in situations like that,
perhaps not focusing on traditional broadband but focusing on
wireless broadband is a key innovation.
I have also been pleasantly surprised by where you are able to
get broadband access in America, but I have been absolutely
stunned by the quality and access of wireless broadband in other
parts of the world.
My wife and I were in India late last year. And she had intentionally found the backwaters of southern India to be the farthest
possible place so that she wouldnt have to deal with my iPhone
anymore. And we were on a boat. And you couldnt see anything
but rice paddies as far as the eye could see.
And then my iPhone went off. And I ended up being able to
download a series of documents at pretty amazing speeds from my
iPhone to my computer to solve the problem. And I could not see
a human, again, as far as the eye could see.
If you can make it profitable to do that in the rice paddies of
India, my sense is there is a business model, although it might not
look traditionally like digging channels and laying broadband fiber
optics, that can be profitable in Pennsylvania.
Ms. DAHLKEMPER. Thank you. Thank you all. I yield back.
Chairwoman VELA ZQUEZ. Okay. I do have another question before we adjourn. I hear every one of the witnesses saying how important broadband is for small businesses to grow their businesses.
However, we all know that small businesses not only face the
economic constraints that they are facing to develop a presence online. So how would you advise small business seeking to harness
broadband to grow their business? And what role should Congress
and the FCC play in promoting broadband adoption by small firms?
And I will start with Ms. Dofelmier, if you can.
Ms. DOFELMIER. Absolutely, Madam Chair. I think that, really,
what is essential is education. I know that Congress is working on
that right now with digital literacy efforts aimed at small businesses.
I think, particularly in minority and under-represented communities, that that is something that is going to be very important in
promoting the adoption of broadband. Really, it is, even when we
have new members that join our team, a lot of times their eyes get
big, even if theyre in their early 20s, and they just say, How do
I use all of these tools? How can I use them to build my business
within your company?
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And so we have to sit down with them and just coach them
through it. And as soon as they realize the potential, they are off
and running. And I think it really just centers around education.
And it doesnt matter your age or your background. It just takes
a little bit of coaching and some effort. And there are so many tools
out there to help you grow your business.
You just have to Google. If you need something free, like a free,
open source software program, because youre strapped financially,
you just have to know what to look for and you can find it.
Chairwoman VELA ZQUEZ. Any other of the witnesses want to
comment? Yes?
Mr. MCDONALD. Just a quick comment. I would urge Congress
to think through carefully what it is going to do. I would suggest
and I have seen too often, not just in Congress but everywhere. We
dont want todays solutions to cause tomorrows problems.
I think that broadband is expanding. And I think that I would
just urge that we make it, as I said earlier, that the rules of the
road are clear and there is not confusion over the next few years,
which I think could stifle, has the potential to stifle, what is an opportunity to expand this successfully in a partnership that will
work.
Chairwoman VELA ZQUEZ. Yes, Mr. Messere?
Mr. MESSERE. Also continuing on that exact same point, as it relays both in small businesses starting their process and in companies that have established their process, absolutely correct. We
plan for the future based on what we know today.
And if we build a business and the profitability of that business
around expectations of access to broadband and that isnt going to
be the case in the future, it could be very, very difficult. And it can
end a good entrepreneurial run.
Chairwoman VELA ZQUEZ. Mr. Burfield?
Mr. BURFIELD. Yes. I mean, to echo two key themes, we have
used the phrase I think throughout this that Broadband is like the
national highway system or Broadband is like the electrical grid.
And in many ways, particularly when you move outside of major
metropolitan areas, it is kind of a natural monopoly.
As an economist, there is often a critical role for government to
play in facilitating the creation of those situations. But there is a
tremendous risk for unintended consequences around technologies
that will be used on broadband that havent even been imagined
yet. I think, as government explores the right role to play, caution
is important.
And then I think going back to the second theme, you know, education is a tremendous part of this. For capital-constrained small
businesses, part of the answer is not to focus so much on capital.
It is to focus on what can you do with the capital that you have
using the free tools that are out there.
But there is absolutely a digital divide that is growing between
people who understand how to pull together hand weave together
these incredibly powerful, inexpensive solutions and those people
who dont. Any sort of effort in terms of improving that kind of education and how to use these tools I think would be critical for our
economy.
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Chairwoman VELA ZQUEZ. Thank you all. This has been quite an
interesting discussion. And, for this Committee, it is an important
one. If we want to provide the tools for small businesses to continue to grow, this is key. So I thank you all.
I ask unanimous consent that members will have five days to
submit a statement and supporting materials for the record. Without objection, so ordered.
This hearing is now adjourned. Thank you.
[Whereupon, at 2:11 p.m., the foregoing matter was concluded.]
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House Hearing, 111TH Congress - Full Committee Hearing On Small Business and Broadband: An Engine For Economic Growth and Job Creation

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House Hearing, 111TH Congress - Full Committee Hearing On Small Business and Broadband: An Engine For Economic Growth and Job Creation

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FULL COMMITTEE HEARING ON

SMALL BUSINESS AND BROADBAND:

COMMITTEE ON SMALL BUSINESS

Small Business Committee Document Number 111-067

U.S. GOVERNMENT PRINTING OFFICE

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For sale by the Superintendent of Documents, U.S. Government Printing Office

HOUSE COMMITTEE ON SMALL BUSINESS

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18:06 Jun 25, 2010

Subcommittee on Contracting and Technology

AARON SCHOCK, Illinois, Ranking

Subcommittee on Finance and Tax

VERN BUCHANAN, Florida, Ranking

Subcommittee on Investigations and Oversight

MARY FALLIN, Oklahoma, Ranking

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Subcommittee on Regulations and Healthcare

DAN LIPINSKI, Illinois

Subcommittee on Rural Development, Entrepreneurship and Trade

BLAINE LUETKEMEYER, Missouri, Ranking

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Velazquez, Hon. Nydia M. .......................................................................................

Velazquez, Hon. Nydia M. .......................................................................................

Statements for the Record:

The National Cable & Telecommunications Association ......................................

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FULL COMMITTEE HEARING ON

U.S. HOUSE OF REPRESENTATIVES,

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Mr. BURFIELD. Chairwoman Velazquez, Ranking Member Graves,

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Mr. MESSERE. My name is Steve Messere, and I am the founder

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Mr. WHISENANT. My name is Greg Whisenant. I am the founder

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Mr. MCDONALD. I am the CEO of BeSafe Technologies. And our

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